MPM Toolkit provides practical advice for the design and deployment of marketing performance
measurement systems. It is also the name of a book with the same goal. The book and blog are both written by David Raab, Principal of Raab Associates Inc. He can
be reached at draab@raabassociates.com. The book can be purchased at www.racombooks.com

Saturday, May 30, 2009

The Sales Lead Management Association and Velos Group published their annual lead management practices survey last week. (Read it here; free registration required.) The survy had a relatively small sample (just over 140 responses) and was weighted towards smaller companies (80% had fewer than 25 sales reps). But it still provides some insight into how many companies actually do business.

The key finding from a marketing measurement viewpoint was that 62.5% of respondents do not track ROI on marketing programs. This is not especially surprising; in fact, it’s better than the 76% reporting they do not use ROI another, larger study released last week by Lenskold Group. (Click here for the Lenskold study.) But it’s still bad news.

Perhaps even more distressing is that just 19.3% of the respondents listed their inability to track ROI as a major sales lead management concern. Subtracting those from the 62.5%, this means that more than 40% were not particularly concerned about their failure to track ROI. It MIGHT also mean that many of those 40% actually could track ROI if they wanted to, although it’s more likely that most don’t have the capability but don’t consider that a problem.

The other findings from the survey also generally confirm that dismal state of the art, at least among smaller firms.

- More than half the respondents (55.5%) said they do not qualify their marketing inquiries before sending them to sales. This implies a huge waste of time by salespeople who then do the qualifications themselves, or, more likely, cherry pick the leads that look superficially promising and ignore the rest. Unless a company has managed to staff its sales team with clairvoyants, this is a guarantee that it will discard some good leads and spend more than it should on some bad ones.

- One-third (33.8%) don’t use sales automation or customer relationship management systems. Again, this is fundamental efficiency-killer. The survey also found that companies using these systems were not terribly satisfied with the results: 54% rated their satisfaction at 5 or less on a scale of 1 to 10. Maybe the problem is with the software itself, but I suspect the issue is lack of training and other supporting investments.

- Half had no formal sales forecasting process (27.2%) or used Excel only (23.8%). Again, this shows very immature sales management at these companies.

I must say I find these results quite sad, given how long these tools have been available and how well their benefits are established.

But perhaps it’s best to adopt the more positive attitude of the survey authors and see this as an opportunity. As they put it, respondents “have a lot of room for improvement in their sales and marketing best practices. By spending time and resources in this critical business area, companies will be able to increase sales, allocate marketing resources more efficiently and will be able to forecast their sales more accurately. All of which will help them survive these difficult economic times.”